The survival of an NGO is dependent on whether it receives funding or not and on the amounts of grants awarded.
According to a recent Bond Survey that involved international NGOs and Bond members across 118 countries, 43% of respondents indicated that their organizations are more likely to collapse in the next six months unless donors awarded more funds and 53% of the respondents indicated that they were already cutting back overseas programmes. The survey pointed out that small to medium sized NGOs with an annual expenditure of $20 to $25 million are expected to suffer the most with their finances and operations being affected.
Now more than ever, donors must not defund NGOs or shy away from funding diversity but rather support NGOs to build long term resilience and invest in preventative measures to help them navigate through threats like Covid 19 or other hazards.
Shifting the paradigm in NGOs resilience building through GFGP Certification.
Unprecedented times trigger a funding crisis for NGOs save for stabilization funds and liquidity funds. The ramifications of such crisis create a long-lasting financial impact to NGOs. In the long run, the fragile communities with extraordinary needs end up being affected the most as the humanitarian sector plays a big part in their health and economic welfare.
Donors face consequential challenges in soliciting for effective and efficient partners with grant management capabilities whom they can support to fight the Covid 19 Pandemic and its effects. In these challenging times, there also exists significant non-compliance and corruption risks. As such digitized accountability approaches and measures need to be adopted and put in place to ensure that funding allocated benefits the local communities and reaches the intended destination.
According to the global humanitarian assistance report 2019, only 1% of the humanitarian funding is directly managed by local NGOs. The fundamental reasons range from local NGOs not having the capacity to fill due diligence forms and manage grants effectively to donors preferring to channel their money through a few trusted parties in order to manage the risks and ensure NGOs comply with their rules.
Donors need to reform their funding mechanisms to fund diversity and build NGOs resilience efforts. This will ensure that NGOs can survive and thrive during threats in this age of Covid 19 and Post Covid 19 era. Donors have a critical role to play in empowering NGOs as well as ensuring that their funds are held accountable and utilized effectively. They play a crucial role in encouraging good practices in financial governance and management.
Particularly, and with a realistic understanding that unpredictable circumstances and social change impacts NGOs sustainability, donors should help NGOs in investing in their development and neutrality. USAID has led the way by introducing the Journey to Self Reliance concept, an initiative meant to strengthen partners’ sustainability and advancing their development agendas.
While resilience building should be a holistic approach, donors should focus on resilience measures that address the sustainability of NGOs to survive unprecedented times and capacity development to ensure more funds reach the local community. The good news is that there is the Global Grant Community (GGC) implemented by the Alliance for Accelerating Excellence in Africa (AESA). AESA is a funding, agenda-setting, programme management initiative created in 2015 through a partnership of the African Academy of Sciences (AAS), the African Union Development Agency (AUDA-NEPAD), and founding and funding global partners.
The GGC provides a standardized, simplified and digitized solution for donors to build trusted partnerships, enhance the capacity development of their partners ensuring sustainability and efficient governance of grants.
Through certification to the Good Financial Grant Practice (GFGP) Standard, the trust, accountability, and capacity development of NGOs will be enhanced. Donors can invite NGOs to assess to the requirements of the GFGP Standard through the online based tool and engage a licenced Certification Body who will audit and certify them as working in compliance with the requirements of the GFGP Standard. This will provide a clear pathway to even the smallest NGOs to improve their grant management processes, procedures and policies, making them more attractive to funders and ready to receive and directly manage funding even at a time when there is a global health crisis. When NGOs are certified as working in compliance to the requirements of the GFGP standard, donors can entrust them with their financial grants, bringing rigour and reassurance to even the highest risk funding environments.
“During these unprecedented times, and underwritten by an award from the IKEA Foundation, we, the Global Grant Community (GGC), have waived our normal charges and reduced them by nearly tenfold regardless of the tier of the GFGP standard against which an organization is being assessed. This will support grant makers to award grants quickly to support communities hit hardest by the Covid-19 pandemic.” Dr Michael Kilpatrick, Senior Advisor to the African Academy of Sciences says.
The GFGP Standard is the world’s first international Standard that focuses on grant management and capacity building. The digitized innovative solution is critical especially at a time when significant challenges in undertaking due diligence exercises including inaccessible hard copy documents, and inability to conduct site visits are being experienced due to the pandemic. [GO1]
“Our laboratory and research practices are at an internationally recognized standard (ISO 1589:2012). However, as with many global research organizations, our financial management and operational practices were lagging far behind. This initiative has therefore been of huge importance to us in ensuring all areas of our operation are aligned with international best practice.” Says Dr Ravi Kumar, Principal Investigator at the Central Research Laboratory at Kempegowda Institute of Medical Sciences, the first organization to be certified under the Good Financial Grant Practice (GFGP).”
To learn more about the GFGP Standard and begin the journey to resilience, visit www.globalgrantcommunity.com
Blog written by Winfred Muasa, the Global Grant Community Program Officer. The Global Grant Community is implemented by the Alliance for Accelerating Excellence in Africa (AESA), a funding, agenda-setting, programme management initiative created in 2015 through a partnership of the African Academy of Sciences (AAS), the African Union Development Agency (AUDA-NEPAD), and founding and funding global partners